There are some ideas that are broken, but attractive enough to some people that they are doomed to be tried again and again.

DRM is one of them.

I was thrilled to see recently that the processing key for *all* HD discs produced to date has been discovered and published. I expect this to lead to the complete unraveling of the Blu-Ray and HD-DVD content protection schemes before even 1% of the potential market for those players has been reached. Good news indeed, because it may inspire the people who setup such schemes to reconsider.

We’ve been here before. The DVD-CSS encryption system was cracked very quickly – stylishly and legally so. Content owners – Hollywood Inc – were outraged and pursued anybody who even referred to the free software which could perform the trivial decryption process. They used the DMCA as a way to extend the laws of copyright well beyond their original intent. They behaved like a deer in the headlights – blinded by the perceived oncoming doom of a world where their content flows quickly and efficiently, unable to see potential routes to safety while those headlights approach. Their market was changing, facing new opportunities and new threats, and they wanted to slow down the pace of change.Content owners think that DRM can slow down the natural evolution of a marketplace.

In the case of movies, a big driver of DRM adoption was the unwillingness of the industry to get out of the analog era. Movies are typically distributed to theaters on celluloid film, great big reels of it. It costs a lot to print and distribute those films to the cinemas who will display it. So the realities of real-world distribution have come to define the release strategy of most movies. Companies print a certain number of films, and ship those to cinemas in a few countries. When the movie run is finished there, those same films are shipped to new countries. This is why a movie is typically released at different times in different countries. It’s purely a physical constraint on the logistics of moving chunks of celluloid, and has no place in today’s era of instant, global, digital distribution.

Of course, when DVD’s came along, content owners did not want people to buy the DVD in the USA, then ship that to Australia before the film was showing in cinemas there. Hence the brain damage that we call region encoding – the content owners designed DVD-CSS so that it was not only encrypted, but contained a region marker that is supposed to prevent it from being played anywhere other than the market for which it was released. If you live outside the US, and have ever tried to buy a small-run por^W documentary movie from the US you’ll know what I mean by brain damage: it doesn’t play outside the US, and the demand in your region is not sufficient to justify a print run in your region-coding, so sorry for you.

The truth is that survival in any market depends on your ability to keep up with what is possible. The movie owners need to push hard for global digital distribution – that will let them get movies out on cinema globally on the same day (modulo translation), the same way that you and I can see everything on YouTube the day it is uploaded.

The truth is also that, as the landscape changes, different business models come and go in their viability. Those folks who try to impose analog rules on digital content will find themselves on the wrong side of the tidal wave. Sorry for you. It’s necessary to innovate (again, sometimes!) and stay ahead of the curve, perhaps even being willing to cannibalize your own existing business – though to be honest cannibalizing someone else’s is so much more appealing.

Right now the content owners need to be thinking about how they turn this networked world to their advantage, not fight the tide, and also how to restructure the costs inherent in their own businesses to make them more in line with the sorts of revenues that are possible in a totally digital world.

Here are some reality bites:

Any DRM that involves offline key storage will be broken. It doesn’t matter if that key is mostly stored on protected hardware, either, because sooner or later one of those gets broken too. And if you want your content to be viewable on most PC’s you will have software viewers. They get broken even faster. So, even if you try to protect every single analog pathway (my favourite is the push for encrypted channels between the hifi and the speakers!) someone, somewhere will get raw access to your content. All you are doing is driving up the cost of your infrastructure – I wonder what the cost of all the crypto associated with HD DVD/BluRay is, when you factor in the complexity, the design, and the incremental cost of IP, hardware and software for every single HD-capable device out there.

The alternative to offline key storage is streaming-only access, and that is equally unprotectable. The classic streaming system, TV broadcast, was hacked when the VCR came out, and that was blessed as fair use. Today we see one of the digital satellite radio companies (Sirius or XM, I think) being sued by content owners for their support of a device which records their CD-quality broadcasts to MP3 players. Web content streaming services that don’t allow you to save the content locally are a very useless form of protection, easily and regularly subverted. And of course not everyone wants to be online when they are watching your content.

It only takes one crack. For any given piece of content, all it takes is one unprotected copy, and you have to assume that anyone who wants it will get it. Whether it is software off a warez site, or music from an MP3 download service in Russia, or a file sharing system, you cannot plug all the holes. Face it, people either want to pay you for your content, or they don’t, and your best strategy is to make it as easy as possible for people who want to comply with the law to do so. That does not translate into suing grannies and schoolkids, it translates into effective delivery systems that allow everyone to do the right thing, easily.

Someone will find a business model that doesn’t depend on the old way of thinking, and if it is not you, then they will eat you alive. You will probably sue them, but this will be nothing but a defensive action as the industry reforms around their new business model, without you. And by the industry I don’t mean your competitors – they will likely be in the same hole – but your suppliers and your customers. The distributors of content are the ones at risk here, not the creators or the consumers.

The music industry’s fear of Napster led them down the DRM rabbit-hole. Microsoft, Apple, SONY and others all developed DRM systems and pitched those to the music industry as a “sane ” approach to online music distribution. It was a nice pitch: “All the distribution benefits of download, all the economic benefits of vinyl”, in a nutshell.

Of these contenders, SONY was clearly ruled out because they are a content owner and there’s no way the rest of the industry would pay a technology tax to a competitor (much as Nokia’s Symbian never gained much traction with the other biggies, because it was too tied to Nokia). Microsoft was a non-starter, because they are too obviously powerful and the music industry could see a hostile takeover coming a mile away. But cute, cuddly Apple wouldn’t harm anyone! So iTunes and AAC were roundly and widely embraced, and Apple succeeded in turning the distribution and playing of legal digital music into a virtual monopoly. Apple played a masterful game, and took full advantage of the music industry’s fear.

The joyful irony in this of course is Steve Jobs recent call for the music industry to adopt DRM-free distribution, giving Apple the moral high ground. Very, very nicely played indeed!

A few years back I was in Davos, at the World Economic Forum. It was perhaps 2002 or 2003, a few years after the dot-com bust. It was the early days of the iPaq, everyone at the conference had been loaned one. I remember clearly sitting in on a session that was more or less a CEO confessional, a sort of absolution-by-admission-of-stupidity gig. One by one, some well known figures stood up and told horror stories about how they’d let the inmates run the asylum, and allowed twenty-something year olds to tell them how to spend their shareholder capital on dot-com projects. This was really interesting to me, as I’d spent the dot-com period telling big companies NOT to over-invest, and to focus on improving their relationships with existing customers and partners using the net, not taking over the world overnight.

But the real kicker came at the very end, when the head of SONY USA, also responsible for its music division, Sir Stringer, stood up to make his peace. He gloated on at length about how SONY had NOT invested in the dot-com, and thus how he felt he must be the only person in the room who had not been taken in by the kids. It was a very funny, very witty speech that earned a round of applause and laughter. I was left wondering whether he had any clue whatsoever how many songs would fit on the iPaq in his pocket, or how long it would take to download them. I suspected not. Of all the CEO’s who had spoken that day, I thought he was the one most likely to be hit hard, and soon, by the digital train.

Sir Stringer is now CEO of SONY worldwide. Funny, then, that the SONY PS3 should have been delayed so that work could be completed on its DRM system.

Some bad ideas are just too attractive to die, once and for all.

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91 Responses to “Note to content owners: DRM doesn’t work”

The reason given for the regioning of DVD’s is a crock. The real reason for regioning DVD’s is that North Americans can, and will, pay more for a DVD than someone in southeast Asia. To combat piracy, the MPAA sells DVD’s outside of North America and Europe for a little money as they dare. Through regioning, you cannot buy a legitimate copy of a film at the cheaper price offered in other parts of the world.

Mark, while your blog post is excellent, I’m a bit surprised that you didn’t put up examples of successful DRM-free businesses like eMusic against some major DRM trainwrecks, like Sony’s rootkit scandal, or Alpha-DVD(http://forum.doom9.org/showthread.php?t=106425).

Robert Devi:
[/i]The other kicker is that any business model that depends on treating your customers as “the enemy” is bound to fail compared to one that treats them as “friends that can help grow the business”. It’s Sales 101.[/i]

[…] Mark Shuttleworth recently posted about some of the follies of DRM. I’ve said in the past that I think it’s possible for DRM to have a place, but when it gets in the way of the consumer it’s just stupid. When people can’t legitimately pay you for something, they’ll just rout around you. Most people are honest and do want to pay, so punishing them for the mistakes of a vast minority who will never pay is silly. From the article: […]

[…] Mark Shuttleworth » Blog Archive » Note to content owners: DRM doesn’t work “There are some ideas that are broken, but attractive enough to some people that they are doomed to be tried again and again. DRM is one of them.” – right in one (tags: MarkShuttleworth DRM economics Blu-Ray HD-DVD) […]

[…] Anyway, Mark wrote a great piece on DRM, and it’s a suggested read for everyone: The truth is also that, as the landscape changes, different business models come and go in their viability. Those folks who try to impose analog rules on digital content will find themselves on the wrong side of the tidal wave. Sorry for you. It’s necessary to innovate (again, sometimes!) and stay ahead of the curve, perhaps even being willing to cannibalize your own existing business – though to be honest cannibalizing someone else’s is so much more appealing. Read the rest here. Leave a Reply Name (required) Mail (will not be published) (required) Website XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong> […]

Let me second Tony Agudo’s applause and comment about not spotlighting successful DRM-free businesses. Another anti-DRM success story, not in the music industry, is Baen Books, who distribute SF and fantasy books in multiple widely-supported electronic formats, entirely without any sort of DRM. They’ve said that trusting their customers has worked for them, and so has allowing some of their content to be distributed not only DRM-free, but cost-free: The Baen Free Library and the (now twelve volumes) Baen CD-ROM Library are widely distributed by SF/Fantasy fans, entirely legally – and in at least one channel where illegal electronic copies of books are traded, they WON’T trade in Baen’s non-free books, out of respect for a company that respects their customers. Baen editors have also said, categorically, that their e-book business has increased the sell-through on their bound-paper releases as well – hard evidence that the customers are NOT the enemy, which is effectively the presumption behind DRM and DRM-supporting laws like DMCA.

I’m an engineer and scientist; one of those who put the Internet together. I quite like the idea of having a 600-million-processor computer, and a radiotelescope like http://www.lofar.org/ , and other wonders of the modern world.

But when a bunch of lawmakers and businessmen tell me that it can be illegal to take a bunch of bits from one part of this 600-million-processor computer to another, I sort-of scratch my head, and say that making things like that illegal is not really very encouraging to future engineers and scientists.

Make of that what you will; but I’m all for Ubuntu and Shuttleworth’s approach to progress.

@The Freelance Traveller:
I’ve checked out Baen Books’ free library quite a while back, and I certainly like it. In fact, it has caused me to look first for books published by them whenever I go to a bookstore. Other book publishers would do well to look at Baen’s business model carefully. And your comment about the black market book trader not trading Baen books should be a small revelation to pro-DRM advocates.

I got here originally via Groklaw too. Penguinistas travel in the same circles 😀

[…] The lawsuits are shortsighted and have inflicted enormous PR damage on the music industry, which is now widely regarded as being avaricious and unwilling to embrace the future. As Shuttleworth says on his blog: “The content owners need to be thinking about how they turn this networked world to their advantage, not fighting the tide. [They also need to be thinking about] how to restructure the costs inherent in their own businesses to make them more in line with the sorts of revenues that are possible in a totally digital world.” […]

“If you live outside the US, and have ever tried to buy a small-run por^W documentary movie from the US you’ll know what I mean by brain damage: it doesn’t play outside the US, and the demand in your region is not sufficient to justify a print run in your region-coding, so sorry for you.”

The funny thing is that actually those por^W documentary movie publisher do it exactly right. Yes, in fact those dirty skin flicks (in general) do come without any regional coding. Isn’t that good news? Mr. Shuttleworth, you can order immediately! ;-p

I couldn’t agree more with you, Mark.
I’m impressed that one of the strong leader of today (and tomorrow) technologies is thinking ahead of time in the way that customers want to be treated.
Your ideas about DRM are incredibly well-thought and correct.
I, as a customer, don’t want to be treated like a thief.
I am currently using suse as my desktop os, but after reading a few of your posts, I think we need more people like you to lead the linux efforts, hence, I will be switching to (K)Ubuntu soon as a mean to give ubuntu (and canonical) support through using (and advocating) it.
Thanks for giving us hope that there is at least one person that is thinking sane enough to realise what good and what’s wrong for the industry.

Great post. The main differences between Windows XP and Vista are more eye-candy and less consumer rights. The former, the Ubuntu team did in a tenth the time it took MS, along with some other great features (thanks!) but the latter…
I got here from defectivebydesign.org. I crusade against Vista`s fatware at any chance.

[…] Mark Shuttleworth, zentrale Person von Ubuntu, hat ein treffenden Artikel zu DRM in seinem Blog veröffentlicht. Der Artikel beginnt passend mit: There are some ideas that are broken, but attractive enough to some people that they are doomed to be tried again and again. […]

DRM has been and will always be a futile exercize as it will always be possible to copy music. To solve it, the industry has to address 2 problems: accessibility and cost. The solution is in making it easier to listen and pay for your music, than to copy it. If I had a personal device connected to the net with essentially the entire world catalogue instantly available at a nominal price (for example a cent a play), my device need not necessarily contain any memory as I would be happy to pay every time I listen to a track. If it is as easy as that, it would be too much effort and rather pointless to copy it from someone else. I have no proof, but from what I see around me I imagine that the vast majority of people do not pay for their music. I do believe people inherently do not like stealing – and if everyone pays a tiny amount the labels and artists will get orders of magnitude more money than currently. Forget the copy protection, make it easier to get and pay and allow us not to be criminals.

[…] April 25th, 2007 | Filed Under Wag of the Finger Tags:apple, apple macbook, dell, drm, ipod, macbook Yeah, yeah, I know. I could give the Wag of the Finger to DRM every day, and I’d be justified in doing so as its sole purpose is to screw us. […]

[…] Edit: Oh, and Mark Shuttleworth has it again: DRM doesn’t work. Who’d have guessed that the leader of the fastest-growing Linux distribution would understand the digital media market? I’m glad someone has some sense. […]

A few words from the operator of a little movie theater in New York City (where we are using more and more FLOSS, including (K)Ubuntu):

You say that moving around chunks of celluloid has no place in today’s movie world. Of course, your perspective echoes that of Mark Cuban and Todd Wagner, who through their U.S. based 2929 companies have advocated and moved toward the simultaneous release of movies on DVD, cable television, and theatrically (with bittorrent-esque plans in the works). These plans of course are implemented through 2929’s Landmark Theater chain, HD-NET television, and Magnolia Films.

Certainly, such “day and date” releasing holds some wisdom. However, few movie theater operators see that wisdom, unless they are vertically integrated – as 2929 is – with the distribution and / or production entities that would stand to benefit most from day an date. Of course, such vertical integration is illegal in the U.S. because of the famous 1948 Paramount decision (although that decision has not been enforced since the Reagan era, which has paved the way not only for Cuban’s endeavors but also the growth of certain parts of Sony and also of sectors of Rainbow Media [Bravo / IFC, etc], to name only some of the most obvious examples).

But let’s backtrack a moment. Let’s step away from the economic imperatives, and revel at the artworks.

You say the physical constraints of celluloid have “no place in today’s era of instant, global, digital distribution.”

With due respect, not only are you wrong, but I hope that this perspective remains wrong for a long time to come.

One of the great pleasures of some movies is seeing them through celluloid projection. Without getting into the physics and chemistry of it, the presentation to and effect upon the spectator is different – and often intentionally so. Why should we force filmmakers to abandon those tools of creating and shaping our experiences? Perhaps those tools will be used less, much as analog audio tape and vinyl have been used less for audio recording and duplication, respectively. Perhaps, in time, unambiguously superior digital formats will emerge, next to which 35mm will assume a quaintness similar to that which 8mm and 16mm hold today next to 35mm. But, today, 16mm and 8mm endure as formats that can be and are used to interesting ends in our exhibition contexts to this day. Are they minority? Sure. But should there be a place for them? Absolutely. Similarly, should there be a place for 35mm celluloid film creation and exhibition today, and into the future? Absolutely. Perhaps not the same dominant place that 35mm holds in most cinemas today (not including my theater, where we show maybe 50% 35mm, 50% relatively high video formats). But let’s not abandon a useful and glorious mode of display just because a certain digital encoding is more cost effective (and, when both formats are available, often inferior).

Digital distribution methods offer many exciting new possibilities for moving image exhibition in the future. Cuban and co are hustling toward that future in fits and starts, as are their peers (and it is quite relevant that the 2929 companies’ “day-and-date” program seems to have stagnated after all sorts of beginning ballyhoo, though competing programs have remained on track. Other important aggregation endeavors are also heading toward that future, including aggregators AppleTV, Netflix Digital Download, Amazon/TiVo, Blip.TV, and the magnificent Democracy Player (aka Miro; and could someone please do something like this in KDE?). The Ubuntu project evokes endless exciting possibilities for this future, such as Edubuntu providing good video editing software to classrooms. Ubuntu Studio, Ubuntu Multimedia Center, and MythTV, and other projects also offer great hope.

But please, let’s not tell all musicians to burn their grand pianos and buy electronic keyboards. Let them play their instruments, too.

Ray Privett
Pioneer Theater (and other stuff)
New York City
USA
North(ern) America

Mark Shuttleworth says:

Thanks for a wonderful comment that reminds us of the art in the entertainment! With hindsight, I agree wholeheartedly that the world would be impoverished if it lost celluloid entirely. I imagine that aficionados will savour 35mm for a very long time, and that the celluloid itself will become increasingly rare and valuable. In a digital age, real things have an entirely new allure and substance. I hope that you are able to sustain your business and passion despite the inevitable shift towards an all-digital distribution model.

[…] May 14th, 2007 Came across this article where Mark Shuttleworth had written about DRM – “There are some ideas that are broken, but attractive enough to some people that they are doomed to be tried again and again”. DRM also known as Digital Restrictions Management (to the opponents of DRM), is a doomed piece of technology brought into the distribution of entertainment in digital formats. When I first heard of DRM, my question was – “If I buy the bloody song, then how is it that I do not own it? How is it that I cannot transfer it from my MP3 player to my computer or elsewhere?”. When I read that I still do not own the damned piece of music, this made me more intrigued about DRM. I read up on artistes (who actually created the damned music in the first place) mention that the digital format of selling music has pretty much left them high and dry. They do not still make much money from the distribution of the music. Many of them do not like such restrictions on their music!. Then why – just cause some major music labels think its right to restrict the way we listen to our music?. […]

[…] Zell would do well to look at the music industry as an example of how not to handle alarming change in your industry. Mark Shuttleworth published a very insightful piece that does the best job I have ever seen of assessing the issues at hand in the content business. “Someone will find a business model that doesn’t depend on the old way of thinking, and if it is not you, then they will eat you alive. You will probably sue them, but this will be nothing but a defensive action as the industry reforms around their new business model, without you. And by the industry I don’t mean your competitors – they will likely be in the same hole – but your suppliers and your customers. The distributors of content are the ones at risk here, not the creators or the consumers.” […]

[…] that further vulnerabilities in the HD DVD content protection system have been uncovered. As I noted previously, any DRM system that depends on offline key distribution will be cracked. This latest vulnerability […]

[…] astronaut and open source supporter Mark Shuttleworth, the man with the money behind Ubuntu Linux, has added his voice to the growing choir of senior executives calling for the end of digital rights […]